Motilal Oswal Securities has moved 7% of its portfolio weight from large-cap to mid- and small-cap stocks for Q1FY27. The brokerage is targeting domestic growth themes in financial services, industrials, and healthcare. Investors may note this rotation as it reflects a strategic bet on smaller companies over traditional market heavyweights.
Motilal Oswal Securities has updated its model portfolio for the first quarter of the 2027 fiscal year, reflecting a notable change in investment strategy. The brokerage has reduced its exposure to large-cap stocks by 700 basis points, reallocating that capital into mid- and small-cap companies. This shift highlights a focus on businesses that the brokerage believes have stronger potential for earnings growth in the domestic market.
Financial Services and Industrial Picks
In the financial services space, the brokerage has added RBL Bank, BSE, HDFC Asset Management Company, and L&T Finance to its portfolio. The strategy for these picks varies; for instance, the brokerage cited market share gains through technology for BSE and potential loan growth for L&T Finance. Meanwhile, the manufacturing and industrial sectors remain central to the firm's outlook. New industrial additions include GE Vernova T&D, which is expected to benefit from rising power transmission spending, and Kirloskar Oil Engines, which is positioned to address the growing demand for power from data centers.
Consumer and Healthcare Strategy
Motilal Oswal has maintained a preference for consumer discretionary products over consumer staples, with the latter currently receiving no allocation in the model portfolio. In the automotive sector, the firm added Gabriel India, banking on the company's recent restructuring efforts to improve its bottom line. Within the healthcare segment, the portfolio now includes Apollo Hospitals and Rubicon Research. These additions are driven by expectations of better profitability in hospital operations and consistent growth from research-backed initiatives.
Strategic Portfolio Weighting
Beyond these specific inclusions, the broader strategy reflects a clear preference for sectors like automobiles, manufacturing, and new-age technology platforms. Conversely, the brokerage is underweight on several major sectors, including private banks, energy, telecom, utilities, and renewable energy. It has opted to hold its existing positions in companies such as Coforge and other private digital platforms.
For investors, the key monitorable will be whether these mid- and small-cap companies can deliver on the projected earnings growth. Historically, mid-cap stocks can be more volatile than large-cap stocks, meaning investors should keep an eye on how these companies manage their profit margins and debt levels in the coming quarters. The performance of these segments often depends on domestic economic activity and consumer demand, which will be important to track as the fiscal year progresses.